Observation vs. Inpatient Admitting Criteria

According to Interqual (Medical Necessity criteria utilized by CMS), Observation should be considered when the patient is hemodynamically stable, does not meet acute care criteria and if any of the following apply:

Stabilization and discharge are expected within 24 hours.

More than six hours of treatment will be required

Clinical diagnosis is unclear and may be determined in less than 24 hours

Procedure requiring observation greater than 6 hours

Complications of ambulatory surgery / procedure

Symptoms unresponsive to at least 4 hours ED treatment

Commercial payers will only authorize observation up to 23 hours. Under Medicare observation is no longer limited to 23 hours and can be used as an effective alternative until the need for admission is clearly determined. Medicare will allow up to 48 hours of observation. However the physician is encouraged to determine by 23 hours whether the patients needs to be admitted or discharged to a lower level of care.

According to Medicare the following are indications for an extended Observation (up to 48 hours) and generally lack medical necessity for inpatient admission unless specific complications or co-morbidities exist:

Rule Out Myocardial Infarction / Chest Pain

Asthma or COPD

Simple Pneumonia

Congestive Heart Failure

Syncope or decreased responsiveness

Atrial Arrhythmias

Gastroenteritis/Esophagitis

Renal Colic/UTI

Dialysis

Lower back pain

Fracture, Sprain, stain of upper are or lower leg

Additional diagnosis appropriate for an observation stay according to commercial payers utilizing Milliman & Robertson criteria include the following:

Diabetes

Rule Out CVA

Hypertension

Dehydration

The admission into observation or inpatient status is based on the patient’s severity of illness and the intensity of service provided. Conversion of an observation case to inpatient is not based on time. A patient in observation status should not be converted to an inpatient at the end of the 23-hour timeframe unless the patient’s acuity and treatment meet inpatient.